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As filed with the Securities and Exchange Commission on May 28, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADVANCED MACHINE VISION CORPORATION
(Exact name of registrant as specified in its charter)
California 2067 Commerce Drive 33-0256103
(State or other Medford, OR 97504 (I.R.S. Employer
jurisdiction of 541-776-7700 Identification No.)
incorporation (Address and telephone number
or organization) of Registrant's principal
executive offices)
Alan R. Steel
2067 Commerce Drive
Medford, OR 97504
Tel. 541-776-7700
Fax. 541-779-6838
(Name, address, and telephone number of agent for service)
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Approximate date of commencement of proposed sale to public: May 29, 1998
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be Offering price aggregate offering registration
securities to be registered Registered per unit (1) price (1) fee
- --------------------------------------- ----------------------- ---------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Class A Common Stock, no par value 652,500 $2.03 $1,324,575.00 $390.75
===============================================================================================================================
<FN>
(1) Estimated solely for the purchase of calculating the registration fee and
based, pursuant to Rule 457(c) on the average of the high and low sale
prices of Registrant's Class A Common Stock as reported on the NASDAQ Stock
Market on May 21, 1998.
</FN>
</TABLE>
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED MAY 28, 1998
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
PROSPECTUS
ADVANCED MACHINE VISION CORPORATION
652,500 Shares of Class A Common Stock
This Prospectus relates to the offer by certain securityholders named herein
(the "Selling Securityholders") for sale to the public from time to time,
beginning approximately May 29, 1998, of (i) 232,500 shares of restricted Class
A Common Stock (the "Common Stock") of Advanced Machine Vision Corporation
("AMV" or the "Company"), and (ii) 420,000 shares of Common Stock issuable upon
the exercise of certain stock options granted to directors of, and consultants
to, the Company. Unless otherwise indicated herein, references herein to the
"Company" means Advanced Machine Vision Corporation and its subsidiaries.
With respect to 200,000 shares of restricted Common Stock, the shares cannot be
traded or transferred unless (i) the employee remains in the employ of the
Company until January 10, 2000, and (ii) a payment of $1.80 per share is made by
the employee to AMV. If any of these conditions are not met, the related shares
of stock will be forfeited and returned to the Company. With respect to 32,500
shares of restricted stock, the shares cannot be traded until January 1, 1999.
The 420,000 shares of Common Stock are issuable upon the exercise of stock
options at prices ranging from $1.56 to $2.03 per share. Such options expire
between 2002 and 2003.
The Common Stock is traded on the Nasdaq Stock Market under the symbol "AMVC."
As of May 21, 1998, the last sale price for the Common Stock as reported on the
Nasdaq Stock Market was $2.03.
This offering is not being underwritten. The Selling Securityholders have
advised the Company that they may sell, directly or through brokers, all or a
portion of the shares of Common Stock owned by each of them in negotiated
transactions or in transactions on the Nasdaq Stock Market or otherwise at
prices and terms prevailing at the time of sale. It is anticipated that usual
and customary brokerage fees will be paid by the Selling Securityholders. In
connection with such sales, the Selling Securityholders and any participating
broker or dealer may be deemed to be "underwriters" of the Shares within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
The Company has informed the Selling Securityholders that the anti-manipulation
provisions of Rules 10b-6 and 10b-7 under the Securities Exchange Act of 1934
(the "Exchange Act") may apply to their sales of the Shares. The Company also
has advised the Selling Securityholders of the requirements for delivery of this
Prospectus in connection with any sale of the Shares.
See "Risk Factors" beginning on page 7 of this Prospectus for a discussion of
certain material risks associated with an investment in the Shares offered
hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
Price to Proceeds to Selling
Public (1) Securityholders (2)
================================================================================
Per Share of Common Stock $2.03 $2.03
Total $1,324,575.00 $1,324,575.00
================================================================================
(1) Based on the last reported sale price of the Common Stock on the Nasdaq
Stock Market on May 21, 1998.
(2) All proceeds from the sale of the Shares offered hereby will be received by
the Selling Securityholders. The amount shown is without deduction for
brokerage fees which may be paid by the Selling Securityholders and for
offering expenses, estimated at $25,000, payable by the Company pursuant to
its agreements and understandings with the Selling Securityholders. See
"Use of Proceeds."
The date of this Prospectus is May 28, 1998
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") and, in accordance
therewith, files reports, proxy or information statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements, and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street NW, Washington, DC 20549, as well as at the following regional
offices: 7 World Trade Center, New York, NY 10048, and Northwestern Atrium
Center, 500 W Madison Street #1400, Chicago, IL 60661. Copies of such materials
also can be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street NW, Washington, DC 20549, at prescribed rates.
The Securities are traded on the Nasdaq Market (small-cap) and the Company's
reports, proxy or information statements, and other information filed with
Nasdaq may be inspected at Nasdaq's offices at 1735 K Street NW, Washington, DC
20006. The Commission maintains a World Wide Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of the Commission's
World Wide Web site is http:/www.sec.gov.
Additional information regarding the Company and the Common Stock offered hereby
is contained in the Registration Statement on Form S-3 of which this Prospectus
is a part (including all exhibits and amendments thereto, the "Registration
Statement"), filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). For further information pertaining to the
Company and the Common Stock, reference is made to the Registration Statement
and the exhibits thereto, which may be inspected and copied at the Commission's
public reference facilities at Judiciary Plaza, 450 Fifth Street NW, Washington,
DC 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been previously filed by the Company
(Commission File No. 0-20097) with the Commission under the Exchange Act are
incorporated in this Prospectus by reference: (a) the Company's Annual Report on
Form 10-K for the year ended December 31, 1997; (b) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1998; and (c) the Company's
current reports on Form 8-K filed on February 27, 1998 (Date of Report: January
1, 1998).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part of this Prospectus from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in any other subsequently filed document which also is, or
is deemed to be, incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
On request, the Company will provide, without charge, to each person to whom
this Prospectus is delivered a copy of any or all of the documents
incorporated by reference (other than exhibits to such documents that are not
specifically incorporated by reference in such documents). Requests for such
copies should be directed to Advanced Machine Vision Corporation, 2067 Commerce
Drive, Medford, OR 97504, Attention: Alan R. Steel, or by telephone at
541-776-7700.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the financial statements and notes thereto incorporated by
reference herein. An investment in the Securities offered hereby involves
certain materials risks. Prospective investors should carefully consider the
factors discussed under "Risk Factors." Unless otherwise indicated, the
information contained in the Prospectus assumes that outstanding warrants other
than the Warrants, and options outstanding under the Company's stock option
plans are not exercised.
The Offering
Class A Common Stock offered hereby.... 652,500 shares
Class A Common Stock outstanding
before offering...................... 10,636,384 shares (3)
Class A Common Stock outstanding
after offerings and exercise of
underlying securities (1)............ 11,056,384 shares (3)
Class B Common Stock outstanding
before and after offering(2)......... 76,835 shares
Use of Proceeds........................ All of the proceeds from the sale of
the Securities offered hereby will be
received by the Selling Securityholders.
The Company will not receive any of the
proceeds from this offering but will
bear estimated expenses of approximately
$25,000.
Risk Factors........................... The securities offered hereby involve a
high degree of risk. See "Risk Factors."
NASDAQ Symbol.......................... Class A Common Stock - AMVC
________________________
(1) Assumes that options to purchase 420,000 shares are exercised. See "Risk
Factors - Need for Additional Financing."
(2) The Class A Common Stock and the Class B Common Stock are substantially
identical except that the Class B Common Stock has limited transferability.
(3) Based on 10,636,384 shares of Class A Common Stock outstanding as of
March 31, 1998.
<PAGE>
RISK FACTORS
Cautionary Statements and Risk Factors
- --------------------------------------
The Company and its representatives may from time to time make written or oral
forward-looking statements with respect to long-term objectives or expectations
of the Company, including statements contained in the Company's filings with the
Securities and Exchange Commission and in its reports to stockholders.
The words or phrases "will likely," "are expected to," "is anticipated," "is
predicted," "forecast," "estimate," "project," "plans to continue," "believes,"
or similar expressions identify "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as of
the date made. In connection with the "Safe Harbor" provisions on the Private
Securities Litigation Reform Act of 1995, the Company is hereby identifying
important factors that could affect the Company's financial performance and
could cause the Company's actual results for future periods to differ materially
from any opinions or statements expressed with respect to future periods in any
current statements.
The Company cautions that the following list of important factors may not be all
inclusive, and it specifically declines to undertake any obligation to publicly
revise any forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events. Among the factors that could have an impact
on the Company's ability to achieve its operating results and growth plan goals
and/or affect the market price of the Company's stock are:
* The Company's history of losses and negative cash flow.
* The uncertain ability to manage growth and integrate acquired businesses.
* Rapid technological change in the Company's markets and the need for new
product development.
* Market acceptance of the Company's new products.
* AMV's dependence on certain markets and the need to expand into new
markets.
* The lengthy sales cycle for the Company's products.
* The Company's highly competitive marketplace.
* The dependence on certain suppliers.
* The risks associated with dependence upon significant customers and
reliance on certain distributors.
* The risks associated with international sales.
* Fluctuations in quarterly operating results and seasonality in certain of
the Company's markets.
* Risks associated with acquisitions and other relationships.
* Dependence upon key personnel.
* The Company's ability to protect its intellectual property.
* The possibility of product liability or other legal claims.
* Exposure to possible warranty and litigation claims.
* The possible need for additional financing.
* The impact of the 1998 Shareholder Rights Plan.
* The inability of the Company or its suppliers or customers to remedy
potential problems with information systems related to the arrival of the
year 2000.
These risk factors are discussed in further detail below.
History of Losses; Negative Cash Flow: Prior to 1995 and in 1996, the Company
experienced losses and negative operating cash flow. The Company believes it may
operate at a negative cash flow for certain periods in the future due to (i) the
need to fund certain development projects, (ii) cash required to enter new
market areas, (iii) irregular bookings by customers due to the relatively high
per-unit cost of the Company's products which may cause fluctuations in
quarterly or yearly revenues, (iv) cash required for the repayment of debt,
especially $3.25 million due in July 1999, and (v) possible cash needed to fully
integrate the operations of the Company's SRC VISION, Inc. and Ventek, Inc.
subsidiaries. If the Company is unable to consistently generate sustained
positive cash flow from operations, the Company must rely on debt or equity
financing.
Although the Company achieved profitability in 1995 and 1997, there can be no
assurance as to the Company's profitability on a quarterly or annual basis in
the future. Furthermore, the non-recurring expenses in early 1996 resulted in a
significant loss for the 1996 fiscal year.
Uncertain Ability to Manage Growth and Integrate Acquired Businesses: As part of
its business strategy, the Company intends to pursue rapid growth. In March and
July 1996, the Company acquired Pulsarr and Ventek which had sales in 1995 of
approximately $11.4 million and $4.4 million, respectively, and would have added
approximately 80% to the Company's 1995 sales on a proforma basis. Pulsarr was
subsequently sold in May 1997. A growth strategy involving the integration of
new entities, such as Ventek, will require the establishment of sales
representatives and distribution relationships, expanded customer service and
support, increased personnel throughout the Company and the continued
implementation and improvement of the Company's operational, financial and
management information systems. There is no assurance that the Company will be
able to attract qualified personnel or to accomplish other measures necessary
for its successful integration of Ventek or other acquired entities or for
internal growth, or that the Company can successfully manage expanded
operations. As the Company expands, it may from time to time experience
constraints that will adversely affect its ability to satisfy customer demand in
a timely fashion. Failure to manage growth effectively could adversely affect
the Company's financial condition and results of operations.
Rapid Technological Change; Product Development: The markets for the Company's
machine vision products are characterized by rapidly changing technology,
evolving industry standards and frequent new product introductions and
enhancements. For example, the Company believes that the 1995 introduction by
Key Technology, Inc. of its new line of vision sorting equipment adversely
affected bookings in late 1995 and 1996. Sales of the Company's products depend
in part on the continuing development and deployment of new technology and
services and applications. The Company's success will depend to a significant
extent upon its ability to enhance its existing products and develop new
products that gain market acceptance. There can be no assurance that the Company
will be successful in selecting, developing and manufacturing new products or
enhancing its existing products on a timely or cost-effective basis or that
products or technologies developed by others will not render the Company's
products noncompetitive or obsolete. Moreover, the Company may encounter
technical problems in connection with its product development that could result
in the delayed introduction of new products or product enhancements.
Market Acceptance of New Products: The Company's future operating results will
depend upon its ability to successfully introduce and market, on a timely and
cost-effective basis, new products and enhancements to existing products. There
can be no assurance that new products or enhancements, if developed and
manufactured, will achieve market acceptance. The Company is currently in the
initial prototype stage of development on a new high-speed software and digital
signal processing technology designed to significantly improve system
performance. There can be no assurance that a market for this system will
develop (i.e., that a need for the system will exist, that the system will be
favored over other products on the market, etc.) or, if a market does develop,
that the Company will be able, financially or operationally, to market and
support the system successfully.
Dependence on Certain Markets and Expansion Into New Markets: The future success
and growth of the Company is dependent upon continuing sales in domestic and
international food processing markets as well as successful penetration of other
existing and potential markets. A substantial portion of the Company's
historical sales has been in the potato and other vegetable processing markets.
Reductions in capital equipment expenditures by such processors due to commodity
surpluses, product price fluctuations, changing consumer preferences or other
factors could have an adverse effect on the Company's results of operations. The
Company also intends to expand the marketing of its processing systems in
additional food markets such as meat and granular food products, as well as
non-food markets such as plastics, wood products and tobacco, and to expand its
sales activities in foreign markets. In the case of Ventek, the wood products
market served is narrow and cyclical, and saturation of that market and the
potential inability to identify and develop new markets could adversely affect
Ventek's growth rate. The Company may not be able to successfully penetrate
additional food and non-food markets or expand further in foreign markets.
Lengthy Sales Cycle: The sales cycle in the marketing and sale of the Company's
machine vision systems, especially in new markets or in a new application, is
lengthy and can be as long as three years. Even in existing markets, due to the
$150,000 to $600,000 price range for each system and possibly significant
ancillary costs required for a customer to install the system, the purchase of a
machine vision system can constitute a substantial capital investment for a
customer (which may need more than one machine for its particular proposed
application) requiring lengthy consideration and evaluation. In particular, a
potential customer must develop a high degree of assurance that the product will
meet its needs, successfully interface with the customer's own manufacturing,
production or processing system, and have minimal warranty, safety and service
problems. Accordingly, the time lag from initiation of marketing efforts to
final sales can be lengthy.
Competition: The markets for the Company's products are highly competitive. A
major competitor of the Company introduced several years ago a new flat-belt
optical sorter product which has increased the competition that the Company
faces. In the case of Ventek, the wood industry continues to develop alternative
products to plywood (e.g., oriented strand board) which do not require vision
systems for quality control. Some of the Company's competitors, including
Pulsarr, which was sold in May 1997 to a company significantly larger than AMV,
may have substantially greater financial, technical, marketing and other
resources than the Company. Important competitive factors in the Company's
markets include price, performance, reliability, customer support and service.
Although the Company believes that it currently competes effectively with
respect to these factors, the Company may not be able to continue to compete
effectively in the future.
Dependence Upon Certain Suppliers: Certain key components and subassemblies used
in the Company's products are currently obtained from sole sources or a limited
group of suppliers, and the Company does not have any long-term supply
agreements to ensure an uninterrupted supply of these components. Although the
Company seeks to reduce dependence on sole or limited source suppliers, the
inability to obtain sufficient sole or limited source components as required, or
to develop alternative sources if and as required, could result in delays or
reductions in product shipments which could materially and adversely affect the
Company's results of operations and damage customer relationships. The purchase
of certain of the components used in the Company's products require an 8 to 12
week lead time for delivery. An unanticipated shortage of such components could
delay the Company's ability to timely manufacture units, damage customer
relations, and have a material adverse effect on the Company. In addition, a
significant increase in the price of one or more of these components or
subassemblies could adversely affect the Company's results of operations.
Dependence Upon Significant Customers and Distribution Channel: The Company sold
equipment to an unaffiliated customer totaling 14% of sales in 1997 and to two
unaffiliated customers totaling 13% and 12% of sales in 1996. Sales to another
two unaffiliated customers totaled 19% and 16% of sales in 1995. Ventek's sales
have been to a relatively small number of multi-location plywood manufacturers.
In the emerging pulp wood industry, the Company utilizes a single exclusive
distributor for its products in North America. In much of the United States and
in many areas in the rest of the world, the Company has entered an agreement
with FMC Corporation to be its exclusive sales representative. While the Company
strives to create long-term relationships with its customers, distributors and
representatives, there can be no assurance that they will continue ordering or
selling additional systems. The Company may continue to be dependent on a small
number of customers, distributors and representatives, the loss of any of which
would adversely affect the Company's business.
Risk of International Sales: Due to its export sales, the Company is subject to
the risks of conducting business internationally, including unexpected changes
in regulatory requirements; fluctuations in the value of the U. S. dollar which
could increase the sales prices in local currencies of the Company's products in
international markets; delays in obtaining export licenses, tariffs and other
barriers and restrictions; and the burdens of complying with a variety of
international laws. For example, the possibility of sales to Indonesian
customers has been adversely affected by that country's recent currency
devaluation. In addition, the laws of certain foreign countries may not protect
the Company's intellectual property rights to the same extent as do the laws of
the United States.
Fluctuations in Quarterly Operating Results; Seasonality: The Company has
experienced and may in the future experience significant fluctuations in
revenues and operating results from quarter to quarter as a result of a number
of factors, many of which are outside the control of the Company. These factors
include the timing of significant orders and shipments, product mix, delays in
shipment, capital spending patterns of customers, competition and pricing, new
product introductions by the Company or its competitors, the timing of research
and development expenditures, expansion of marketing and support operations,
changes in material costs, production or quality problems, currency
fluctuations, disruptions in sources of supply, regulatory changes and general
economic conditions. These factors are difficult to forecast, and these or other
factors could have a material adverse effect on the Company's business and
operating results. Moreover, due to the relatively fixed nature of many of the
Company's costs, including personnel and facilities costs, the Company would not
be able to reduce costs in any quarter to compensate for any unexpected
shortfall in net sales, and such a shortfall would have a proportionately
greater impact on the Company's results of operations for that quarter. For
example, a significant portion of the Company's quarterly net sales depends upon
sales of a relatively small number of high-priced systems. Thus, changes in the
number of such systems shipped in any given quarter can produce substantial
fluctuations in net sales, gross profits, and net income from quarter to
quarter. In addition, in the event the Company's machine vision systems' average
selling price increases, of which there can be no assurance, the addition or
cancellation of sales may exacerbate quarterly fluctuations in revenues and
operating results.
The Company's operating results may also be affected by certain seasonal trends.
For example, the Company may experience lower sales and order levels in the
first quarter when compared with the preceding fourth quarter due to the
seasonality of certain harvested food items and the timing of annual or
semi-annual customer plant shut-downs during which systems are installed. The
Company expects these seasonal patterns to continue, though their impact on
revenues is expected to decline as the Company continues to expand its presence
in non-agricultural and other markets which are less seasonal.
Risks Associated With Acquisitions: The Company may pursue strategic
acquisitions or joint ventures in addition to the acquisitions of Pulsarr
(subsequently divested in May 1997) and Ventek as part of its growth strategy.
While the Company presently has no understandings, commitments or agreements
with respect to any further acquisition, the Company anticipates that one or
more potential opportunities may become available in the future. Acquisitions
and joint ventures would require investment of operational and financial
resources and could require integration of dissimilar operations, assimilation
of new employees, diversion of management resources, increases in administrative
costs and additional costs associated with debt or equity financing. For these
reasons, any acquisition or joint venture by the Company may have an adverse
effect on the Company's results of operations or may result in dilution to
existing shareholders.
Dependence Upon Key Personnel: The Company's success depends to a significant
extent upon the continuing contributions of its key management, technical, sales
and marketing and other key personnel. Except for William J. Young, the
Company's President and Chief Executive Officer, Alan R. Steel, the Company's
Chief Financial Officer, Dr. James Ewan, SRC's President and Chief Executive
Officer, and the four former stockholders of Ventek, the Company does not have
long-term employment agreements or other arrangements with such individuals
which would encourage them to remain with the Company. The Company's future
success also depends upon its ability to attract and retain additional skilled
personnel. Competition for such employees is intense. The loss of any current
key employees or the inability to attract and retain additional key personnel
could have a material adverse effect on the Company's business and operating
results.
Intellectual Property: The Company's competitive position may be affected by its
ability to protect its proprietary technology. Although the Company has a number
of United States and foreign patents, such patents may not provide meaningful
protection for its product innovations. The Company may experience additional
intellectual property risks in international markets where it lacks patent
protection.
Product Liability and Other Legal Claims: From time to time, the Company may be
involved in litigation arising out of the normal course of its business,
including product liability, patent and other legal claims. While the Company
has a general liability insurance policy which includes product liability
coverage up to an aggregate amount of $10 million, the Company may not be able
to maintain product liability insurance on acceptable terms in the future.
Litigation, regardless of its outcome, could result in substantial cost to and
diversion of effort by the Company. Any infringement claims or litigation
against the Company could materially and adversely affect the Company's
business, operating results and financial condition. If a substantial product
liability or other legal claim against the Company were sustained that was not
covered by insurance, there could be an adverse effect on the Company's
financial condition and marketability of the affected products.
Warranty Exposure and Performance Specifications: The Company generally provides
a one-year limited warranty on its products. In addition, for certain
custom-designed systems, the Company contracts to meet certain performance
specifications. In the past, the Company has incurred higher warranty expenses
related to new products than it typically incurs with established products. The
Company may incur substantial warranty expenses in the future with respect to
new products, as well as established products, or with respect to its
obligations to meet performance specifications, which may have an adverse effect
on its results of operations and customer relationships.
Possible Need for Additional Financing: The Company may seek additional
financing; however, the Company may not be able to obtain any additional
financing on terms satisfactory to the Company, if at all. Potential increases
in the number of outstanding shares of the Company's Class A Common Stock due to
convertible debt, warrants and stock options, a substantial loss in 1996 and
debt incurred for the acquisition of Ventek due in 1999, may limit the Company's
ability to negotiate additional debt or equity financing.
Shareholder Rights Plan: In February 1998, the Company implemented a stock
rights program. Pursuant to the program, stockholders of record on February 27,
1998 received a dividend of one right to purchase for $15 one one-hundredth of a
share of a newly created Series A Junior Participating Preferred Stock. The
rights are attached to AMV's Class A Common Stock and will also become attached
to shares issued in the future. The rights will not be traded separately and
will not become exercisable until the occurrence of a triggering event, defined
as an accumulation by a single person or group of 20% or more of AMV's Class A
Common Stock. The rights will expire on February 26, 2008 and are redeemable at
$.0001 per right.
After a triggering event, the rights will detach from the Class A Common Stock.
If AMV is then merged into, or is acquired by, another corporation, the Company
has the opportunity to either (i) redeem the rights or (ii) permit the rights
holder to exercise the rights and receive therefore stock of AMV or the
acquiring company equal to two times the exercise price of the right (i.e.,
$30). Under clause (ii) above, the rights attached to the acquirer's stock
become null and void. The effect of the rights program is to make a potential
acquisition of the Company more expensive for the acquirer if, in the opinion of
AMV's Board of Directors, the offer is inadequate.
While the Company is not aware of any current intent to acquire a sufficient
number of shares of the Company's common stock to trigger distribution of the
Rights, existence of the Rights could discourage offers for the Company's stock
that may exceed the current market price of the stock, but that the Board of
Directors deems inadequate.
Year 2000 Issues: AMV has established a company-wide initiative to examine the
implications of the Year 2000 on the Company's computing systems and related
technologies, and to assess the potential need for changes. The Company has
identified areas of potential business impact, and appropriate modifications to
its computing systems are underway. Management believes this will be
accomplished in a timely manner. The Company is also communicating with
suppliers and customers to coordinate Year 2000 conversion. Management does not
currently believe that the costs related to the Company's compliance with the
Year 2000 issue will have a material adverse effect on the Company's financial
position, results of operations or cash flows. However, in the event that the
Company or any of the Company's significant suppliers or customers experience
disruptions due to the Year 2000 issue, the Company's operations could be
adversely affected.
USE OF PROCEEDS
Other than the exercise price of such of the Options as may be exercised and the
purchase price of a portion of the restricted stock, the Company will not
receive any of the proceeds from the sale of the Common Stock offered hereby.
The Company will pay the costs of this offering, which are estimated to be
$25,000, other than brokerage and counsel fees which may be incurred by a
Selling Securityholder. Holders of the Options or the portion of the restricted
stock subject to payment provisions are not obligated to exercise their Options
or purchase the restricted shares, and there can be no assurance that such
holders will choose to exercise or purchase all or any of such Options or
shares. The gross proceeds to the Company in the event that all of the Options
are exercised and restricted shares are purchased would be as follows:
Number of
Warrants Exercise Price Proceeds to
or Options per Share Company
---------- -------------- -----------
Restricted Shares: 200,000 $ 1.80 $ 360,000
Options: 300,000 1.69 507,000
30,000 2.00 60,000
75,000 1.56 117,000
15,000 2.03 30,450
-----------
Total $ 1,074,450
===========
The Company intends to apply the net proceeds it receives from exercise of the
Options or purchase of the restricted shares, to the extent any are exercised,
to augment its working capital and for general corporate purposes.
SELLING SECURITYHOLDERS
All of the Securities offered hereby are being sold by the Selling
Securityholders.
<TABLE>
<CAPTION>
Ownership
Ownership Prior to Registration After Offering
-------------------------------------------------- ------------------------------
Type and Number
Type and Number of Securities Type and Number
Beneficial Owner of Securities (1) Percent (5) Being Offered of Securities Percent (5)
---------------- ----------------- ----------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
William J. Young (2) 760,500 shares of 107,500 shares of 653,000 shares of
Common Stock 6.6% Common Stock Common Stock 5.8%
James Ewan (2) 375,700 shares of 69,500 shares of 306,200 shares of
Common Stock 3.4% Common Stock Common Stock 2.8%
Alan R. Steel 320,500 shares of 55,500 shares of 265,000 shares of
Common Stock 2.9% Common Stock Common Stock 2.4%
Vikram Dutt (2) 100,000 shares of
Common Stock * Same 0 0%
Robert M. Loeffler (2) 100,000 shares of
Common Stock * Same 0 0%
Haig S. Bagerdjian (2) 100,000 shares of
Common Stock * Same 0 0%
Dario Bianchi (4) 35,000 shares of 30,000 shares of 5,000 shares of
Common Stock * Common Stock Common Stock 0%
PeopleVision, Inc. (4) 15,000 shares of
Common Stock * Same 0 0%
Eugene G. Heller (3) 82,100 shares of 75,000 shares of 7,100 shares of
Common Stock * Common Stock Common Stock 0%
<FN>
* Less than 1%.
(1) See table below for types of securities included.
(2) Messrs. Young, Ewan, Bagerdjian, Dutt and Loeffler are directors of the
Company.
(3) Eugene G. Heller is a principal of Silverman Heller Associates, public
relations counsel to the Company.
(4) Consultants to the Company.
(5) Percents are based on outstanding Common Stock as of March 31, 1998.
</FN>
</TABLE>
Ownership prior to registration in the above table consists of the following:
Shares Owned
----------------------------
Name Unrestricted Restricted Options Total
---- ------------ ---------- ------- -----
William J. Young 153,000 107,500 500,000 760,500
Dr. James Ewan 6,200 69,500 300,000 375,700
Alan R. Steel 15,000 55,500 250,000 320,500
Vikram Dutt -- -- 100,000 100,000
Robert M. Loeffler -- -- 100,000 100,000
Haig S. Bagerdjian -- -- 100,000 100,000
Dario Bianchi 5,000 -- 30,000 35,000
PeopleVision, Inc. -- -- 15,000 15,000
Eugene G. Heller 7,100 -- 75,000 82,100
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be offered and sold from time to
time by the Selling Securityholders listed above, or by pledgees, donees,
transferees or other successors in interest. The Selling Securityholders will
act independently of the Company in making decisions with respect to sales,
including, without limitation, the timing, manner and price of sales.
The shares of Common Stock covered by this Prospectus may be sold by the Selling
Securityholders in one or more transactions on the Nasdaq Stock Market, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. In addition to other
manners of sale, the shares of Common Stock may be sold in one or more of the
following ways: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares of Common Stock as agent but may position and resell
a portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. Thus, the period of
distribution of such shares of Common Stock may occur over an extended period of
time.
The Company will bear all costs and expenses of the registration of the Shares
under the Securities Act and certain state securities laws, other than fees of
counsel for the Selling Securityholders and any discounts or commissions payable
with respect to sales of such Shares.
In offering the securities, the Selling Securityholders and any broker-dealers
and any other participating broker-dealers who execute sales for the Selling
Securityholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales, and any profits realized by the
Selling Securityholders and the compensation of such broker-dealer may be deemed
to be underwriting discounts and commissions. In addition, any shares covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
The Company has advised the Selling Securityholders that during such time as
they may be engaged in a distribution of securities included herein they are
required to comply with Rules 10b-6 and 10b-7 under the Exchange Act (as those
Rules are described in more detail below) and, in connection therewith that they
may not engage in any stabilization activity, except as permitted under the
Exchange Act, are required to furnish each broker-dealer through which Common
Stock included herein may be offered copies of this Prospectus, and may not bid
for or purchase any securities of the Company or attempt to induce any person to
purchase any securities except as permitted under the Exchange Act.
Rule 10b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection with a distribution of
the security.
DESCRIPTION OF SECURITIES
The authorized capital of AMV consists of 60,000,000 shares of Class A Common
Stock, no par value, 3,000,000 shares of Class B Common Stock, no par value, and
5,000,000 shares of preferred stock, no par value (the "Preferred Stock"). At
March 31, 1998, there were 10,636,384 shares and 76,835 shares of the Class A
and Class B, respectively, and no shares of Preferred Stock outstanding.
Common Stock
- ------------
General Provisions of Class A and Class B Common Stock
The Class A and Class B Common Stock (the "Common Stock") are substantially
identical on a share-for-share basis. The holders of Common Stock vote as a
single class on all matters to come before stockholders for a vote and may
cumulate their votes in the election of directors upon giving notice as required
by law. Each share of Class B Common Stock is automatically converted into one
share of Class A Common Stock upon its sale or transfer, or the death of the
holder.
All of the Common Stock is entitled to share equally in dividends from sources
available therefor when, as and if declared by the Board of Directors, and upon
liquidation or dissolution of AMV, whether voluntary or involuntary, and to
share equally in the assets of AMV available for distribution to stockholders.
Stockholders have no preemptive rights. All outstanding shares are fully paid
(except for 200,000 shares of restricted Common Stock), non-assessable and
legally issued. The Board of Directors is authorized to issue additional shares
of Common Stock within the limits authorized by AMV's charter and without
stockholder action.
Reference is made to AMV's Restated Articles of Incorporation, and Amended and
Restated By-Laws, as well as to the applicable statutes of the State of
California, for more detailed description of the rights and liabilities of
stockholders.
Preferred Stock
- ---------------
Shares of Preferred Stock may be issued from time to time in one or more series;
and the AMV Board of Directors, without further stockholder approval, is
authorized to fix the dividend rights and terms, conversion rights, voting
rights (whole, limited or none), redemption rights and terms, liquidation
preferences, sinking funds and any other rights, preferences, privileges and
restrictions applicable to each such series of Preferred Stock. The purpose of
authorizing the AMV Board of Directors to determine such rights and preferences
is to eliminate delays associated with a stockholder vote on specific issuances.
The issuance of the Preferred Stock, while providing flexibility in connection
with possible acquisitions and other corporate purposes, could, among other
things, adversely affect the voting power of the holders of Common Stock and,
under certain circumstances, make it more difficult for a third party to gain
control of the Company; such issuance also could adversely affect the
distributions on and liquidation preferences of the Class A Common Stock by
creating more series of Preferred Stock with distribution or liquidation
preferences senior to the Class A Common Stock. In the event that shares of
Preferred Stock are issued as securities convertible into shares of Class A
Common Stock, the holders of Class A Common Stock may experience dilution.
In February 1998, the Company implemented a stock rights program. Pursuant to
the program, stockholders of record on February 27, 1998 received a dividend of
one right to purchase for $15 one one-hundredth of a share of a newly created
Series A Junior Participating Preferred Stock. The rights are attached to AMV's
Class A Common Stock and will also become attached to shares issued in the
future. The rights will not be traded separately and will not become exercisable
until the occurrence of a triggering event, defined as an accumulation by a
single person or group of 20% or more of AMV's Class A Common Stock. The rights
will expire on February 26, 2008 and are redeemable at $.0001 per right.
After a triggering event, the rights will detach from the Class A Common Stock.
If AMV is then merged into, or is acquired by, another corporation, the Company
has the opportunity to either (i) redeem the rights or (ii) permit the rights
holder to exercise the rights and to receive therefore stock of AMV or the
acquiring company equal to two times the exercise price of the right (i.e.,
$30). Under clause (ii) above, the rights attached to the acquirer's stock
become null and void. The effect of the rights program is to make a potential
acquisition of the Company more expensive for the acquirer if, in the opinion of
AMV's Board of Directors, the offer is inadequate.
Schedule of Outstanding Stock, Warrants and Potential Dilution
- --------------------------------------------------------------
In addition to the Common Stock offered hereby, the Company has issued
securities which, upon conversion or exercise, will significantly increase the
number of shares of Class A Common Stock outstanding. The following table
summarizes, as of March 31, 1998, outstanding common stock, potential dilution
to the outstanding common stock upon exercise of warrants or conversion of
convertible debt, and proforma proceeds or debt reduction from the exercise of
warrants or conversion of debt. The table also sets forth the exercise or
conversion prices and warrant expiration and debt due dates.
<TABLE>
<CAPTION>
Proforma
Number or Principal Common Proceeds
Amount Outstanding Stock After Conversion or Debt
Security at March 31, 1998 Conversion Price Reduction
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock:
Class A 10,636,384 10,636,384
Class B 76,835 76,835
------------ ------------
Total currently outstanding 10,713,219 10,713,219
------------ ------------
Warrants (expiration date):
D (6/30/98-7/31/98) 275,000 275,000 $ 2.75 $ 756,000
G (2/28/99) 240,000 240,000 2.00 480,000
I (7/23/01) 1,000,000 (A) 1,000,000 2.25 2,250,000
J (9/30/99) 300,000 300,000 2.03 609,000
------------ ------------
1,815,000 4,095,000
------------ ------------
Convertible Debt (due date):
6.75% Notes (4/16/01) $ 900,000 422,535 2.13 900,000
6.75% Ventek Note (7/23/99) $ 2,250,000 1,000,000 2.25 2,250,000
Ventek Note (7/23/99) $ 1,529,000 (A) 1,800,000 1,529,000
------------ ------------
3,222,535 4,679,000
------------ ------------
Potentially outstanding shares
and proforma proceeds
or reduction of debt 15,750,754 $ 8,774,000
============ ============
<FN>
(A) The Company issued the $1,529,000 note and Class I Warrant in connection
with the Ventek acquisition. The note is payable, (a) at the Company's
option, in cash or by delivery of up to 1,800,000 shares of Class A Common
Stock on the third anniversary date of the note; or (b) solely in cash in
the event AMV Common Stock is delisted from the Nasdaq Stock Market. The
Warrant vests 25% per year through 1999 if sales and earnings objectives are
achieved. As of December 31, 1997, the first 25% increment (for 1996) of the
Warrant was vested and the second 25% increment (for 1997) did not vest as
the objectives were not met. The second increment will only vest in the
future if cumulative goals are achieved.
</FN>
</TABLE>
The proforma amounts above are for illustrative purposes only. Unless the market
price of AMV's Common Stock rises significantly above the exercise or conversion
prices, it is unlikely that any warrants will be exercised or that the debt will
be converted.
On March 31, 1998, AMV had outstanding options to purchase 3,426,000 shares of
Common Stock (including options to purchase 420,000 shares of Common Stock,
which Common Stock is being registered herein), 2,944,000 of which are under its
stock option plans.
Transfer and Warrant Agent
- --------------------------
The Transfer and Warrant Agent for AMV's Class A and Class B Common Stock and
Class D Warrants is American Stock Transfer & Trust Company, 40 Wall Street, New
York, NY 10005.
Reports to Stockholders
- -----------------------
AMV intends to furnish to stockholders, after the close of each fiscal year, an
annual report relating to the operations of AMV and containing financial
statements audited and reported upon by its independent public accountants. In
addition, AMV may furnish to stockholders such other reports as may be
authorized, from time to time, by the Board of Directors.
<PAGE>
========================================== ==================================
No dealer, salesman or other person has
been authorized to give any information
or make any representations, other than
those contained in this Prospectus, in
connection with the offering hereby, and,
if given or made, such information and
representations must not be relied upon 652,500 Shares of
as having been authorized by the Company Class A Common Stock
or the Selling Securityholders. This
Pospectus does not constitute an offer
to sell, or a solicitation of an offer to
buy, any securities to any person in any
State or other jurisdiction in which such
offer or solicitation is unlawful. Neither ADVANCED MACHINE
the delivery of this Prospectus nor any VISION CORPORATION
sale made hereunder shall, under any
circumstances, create any implication that
there has been no change in the affairs of
the Company or the facts herein set forth
since the date hereof.
-----------------
-----------------
PROSPECTUS
-----------------
May 28, 1998
========================================== ==================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The following table sets forth an itemized statement of all the amounts of all
expenses to be incurred in connection with the issuance and distribution of the
securities that are the subject of this Registration Statement. The Company
shall bear such expenses. All amounts shown, other than the Securities and
Exchange Commission registration fee, are estimates.
Securities and Exchange Commission registration fee.............. $ 390.75
Printing expenses................................................ 2,000.00
Transfer Agent fees.............................................. --
Legal fees and expenses.......................................... 10,000.00
Accounting fees and expenses..................................... 5,000.00
"Blue sky" fees and expenses..................................... 3,000.00
Miscellaneous expenses........................................... 4,609.25
------------
Total....................................................... $ 25,000.00
============
Item 15. Indemnification of Directors and Officers
- --------------------------------------------------
Under California law, a California corporation may eliminate or limit the
personal liability of a director to the corporation for monetary damages for
breach of the director's duty of care as a director, provided that the breach
does not involve certain enumerated actions, including, among other things,
intentional misconduct or knowing and culpable violation of the law, acts or
omissions which the director believes to be contrary to the best interests of
the corporation or its shareholders or which reflect an absence of good faith on
the director's part, the unlawful purchase or redemption of stock, payment of
unlawful dividends and receipt of improper personal benefits. The Company's
Board of Directors believes that such provisions have become commonplace among
major corporations and are beneficial in attracting and retaining qualified
directors, and the Company's Articles of Incorporation include such provisions.
The Company's Articles of Incorporation and By-Laws also impose a mandatory
obligation upon Company to indemnify any director or officer to the fullest
extent authorized or permitted by law (as now or hereinafter in effect),
including under circumstances in which indemnification would otherwise be at the
discretion of the Company. In addition, the Company has entered into indemnity
agreements with each of its directors and officers providing for the maximum
indemnification permitted or authorized by law.
The foregoing indemnification provisions are broad enough to encompass certain
liabilities of directors and officers under the Securities Act of 1933.
Item 16. Exhibits
- ------------------
The following exhibits, which are furnished with this Registration Statement or
incorporated by reference, are filed as part of this Registration Statement:
Exhibit
Number Description
- ------- -----------
3.1 Restated Articles of Incorporation of the Company as amended to date.
4.4 Form of Class D Warrant Agreement.
4.6 Form of Class G Warrant Agreement.
4.7 Form of Class I Warrant Agreement.
4.8 Form of Class J Warrant Agreement.
4.9 Form of stock option agreement.
4.10 Form of 1997 Restricted Stock Plan and restricted stock agreement.
4.11 Rights Agreement dated February 27, 1998 between the Company and
American Stock Transfer and Trust Company.
5.1 Opinion of Troy & Gould Professional Corporation regarding the
legality of the securities registered hereunder.
23.1 Consent of Price Waterhouse LLP (contained in Part II).
23.2 Consent of Troy & Gould Professional Corporation (contained in
Exhibit 5.1).
Item 17. Undertakings
- ----------------------
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to this
registration statement.
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement; provided,
however, that (i) and (ii) do not apply if the registration statement is on Form
S-3, and the information required to be included in a post-effective amendment
is contained in periodic reports filed by the registrant pursuant to section 13
or section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Company hereby undertakes:
That for purposes of determining any liability under the Securities Act, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Medford, Oregon on May 22, 1998.
ADVANCED MACHINE VISION CORPORATION
By: /s/ William J. Young
-------------------------------------
William J. Young
President and Chief Executive Officer
Principal Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below
constitutes and appoints William J. Young and Alan R. Steel, and each of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to his registration statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of the, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William J. Young Chairman of the Board of Directors,
- -------------------------------------- Chief Executive Officer and President
William J. Young Principal Executive Officer May 22, 1998
/s/ Alan R. Steel Chief Financial Officer
- -------------------------------------- Principal Financial and Accounting May 22, 1998
Alan R. Steel Officer
/s/ Haig S. Bagerdjian Director May 18, 1998
- --------------------------------------
Haig S. Bagerdjian
/s/ Vikram Dutt Director May 18, 1998
- --------------------------------------
Vikram Dutt
/s/ James Ewan Director May 8, 1998
- --------------------------------------
James Ewan
/s/ Robert M. Loeffler Director May 15, 1998
- --------------------------------------
Robert M. Loeffler
/s/ Jack Nelson Director May 21, 1998
- --------------------------------------
Jack Nelson
/s/ Rodger A. Van Voorhis Director May 18, 1998
- --------------------------------------
Rodger A. Van Voorhis
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Description Page Number
- ------- ----------- -----------
3.1 Restated Articles of Incorporation of the
Company as amended to date. (6)
4.4 Form of Class D Warrant Agreement. (1)
4.6 Form of Class G Warrant Agreement. (2)
4.7 Form of Class I Warrant Agreement. (4)
4.8 Form of Class J Warrant Agreement. 20
4.9 Form of stock option agreement. (1)
4.10 Form of 1997 Restricted Stock Plan and
restricted stock agreement. (4)
4.11 Rights Agreement dated February 27, 1998
between the Company and American Stock
Transfer and Trust Company. (6)
5.1 Opinion of Troy & Gould Professional
Corporation regarding the legality of the
securities registered hereunder. 26
23.1 Consent of Price Waterhouse LLP
(contained in Part II). 27
23.2 Consent of Troy & Gould Professional
Corporation (contained in Exhibit 5.1).
_____________________
(1) Previously filed as an exhibit to Form S-1
(File No. 33-45126).
(2) Filed with the SEC on April 14, 1996, as an
exhibit to the Company's Form 10-K for the
year ended December 31, 1995.
(3) Filed with the SEC on July 30, 1996, as an
exhibit to the Company's Form 8-K dated
July 24, 1996.
(4) Filed with the SEC on January 22, 1997, as
an exhibit to the Company's Form 8-K dated
January 9, 1997.
(5) Filed with the SEC on May 14, 1997 as an
exhibit to the Company's Form 10-Q for the
quarter ended March 31, 1997.
(6) Filed with the SEC on February 20, 1998 as
an exhibit to the Company's Form 8-A.
EXHIBIT 4.8
THESE WARRANTS AND ANY SHARES OF CLASS A COMMON STOCK ISSUABLE UPON THEIR
EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). THESE WARRANTS ARE NOT TRANSFERABLE, AND ANY SHARES OF CLASS A
COMMON STOCK ISSUABLE UPON THEIR EXERCISE MAY NOT BE TRANSFERRED UNTIL (1) A
REGISTRATION STATEMENT UNDER THE ACT SHALL HAVE BECOME EFFECTIVE WITH RESPECT
THERETO, OR (2) RECEIPT BY THE ISSUER OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT
REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER AND THAT SUCH PROPOSED
TRANSFER IS NOT IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.
CLASS J WARRANT
TO PURCHASE CLASS A COMMON STOCK
Warrant No. 1
This Warrant issued by ARC Capital, a California corporation (the
"Company"), as of October 1, 1996, entitles H&H Beheer BV (the registered
"Holder") to purchase 300,000 shares of the Company's Class A Common Stock at an
initial purchase price of $2.025 per share (the "Purchase Price").
This Class J Warrant was issued in connection with the execution of a Deed
of Compromise dated September 30, 1996, among SRC VISION, Inc., a wholly-owned
subsidiary of the Company, H&H Beheer BV, Hamm & Hak Engineering, BV and
Foodectronics BV ("Deed of Compromise").
SECTION 1. Definitions. As used herein, the following terms shall have the
following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the Class A Common Stock of the Company,
whether now or hereafter authorized.
(b) "Corporate Office" shall mean the office of the Company at which at any
particular time its principal business shall be administered, which office is
located at the date hereof at 2067 Commerce Drive, Medford, Oregon 97504,
Attention: President.
(c) "Exercise Date" shall mean the date on which the Company shall have
received both (a) the Warrant, with an exercise form acceptable to the Company
and duly executed by the Registered Holder thereof or his attorney duly
authorized in writing, and (b) the Purchase Price.
(d) "Initial Warrant Exercise Date" shall mean October 1, 1996.
(e) "Purchase Price" shall mean the purchase price to be paid per share of
Common Stock upon exercise of each Warrant in accordance with the terms hereof,
which price shall be $2.025, subject to adjustment from time to time pursuant to
the provisions of Section 7 hereof, and subject to the Company's right to reduce
the Purchase Price upon notice to all Registered Holders. The Purchase Price may
be paid in whole or in part either (i) in cash, or by official bank or certified
check made payable to the Company, of an amount in lawful money of the United
States of America equal to the applicable Purchase Price, or (ii) by delivery of
Common Stock in transferable form, such Common Stock to be valued for such
purpose at its fair market value on the Exercise Date (a "Cashless Exercise").
For purposes of a Cashless Exercise, the fair market value shall be deemed to be
the last sale price of the Common Stock on the business day prior to the date of
the Cashless Exercise or, in case no such reported sales take place on such day,
the average of the last reported bid and asked prices of the Common Stock on
such day, in either case on the principal national securities exchange on which
the Common Stock is admitted to trading or listed, or if not listed or admitted
to trading on any such exchange, the average of the last reported bid and asked
prices of the Common Stock on such day as reported by NASDAQ, or other similar
organization if NASDAQ is no longer reporting such information, or if not so
available, the fair market price of the Common Stock as determined by the Board
of Directors.
(f) "Registered Holders" shall mean the persons in whose names the Warrants
shall be registered on the books maintained by the Company.
(g) "Warrant Expiration Date" shall mean the earlier of (i) 5:00 P.M.
(Oregon time) on September 30, 1999, except that if such date shall in the State
of Oregon be a holiday or a day on which banks are authorized to close, then
5:00 P.M. (Oregon time) on the next following day which in the State of Oregon
is not a holiday or a day on which banks are authorized to close, or (ii) the
date of a breach of the Deed of Compromise. Upon notice to all Registered
Holders the Company shall have the right to extend the Warrant Expiration Date.
SECTION 2. Warrants and Issuance of Warrant Agreements.
(a) This Warrant initially entitles the Registered Holder to purchase an
aggregate of 300,000 shares of Common Stock upon the exercise thereof, in
accordance with the terms hereof, subject to modification and adjustment as
provided in Section 7.
(b) From time to time, up to the Warrant Expiration Date, the Company shall
execute and deliver Warrants in required whole number denominations to the
persons entitled thereto in connection with any exchange permitted under this
Warrant; provided that no Warrant shall be issued except (i) those initially
issued hereunder; (ii) those issued on or after the Initial Warrant Exercise
Date, upon the partial exercise of this Warrant, to evidence any unexercised
Warrants held by the exercising Registered Holder; (iii) those issued upon any
exchange pursuant to Section 5; (iv) those issued in replacement of lost,
stolen, destroyed or mutilated Warrants pursuant to Section 6; and (v) at the
option of the Company, in such form as may be approved by its Board of
Directors, to reflect (a) any adjustment or change in the Purchase Price or the
number of shares of Common Stock purchasable upon exercise of the Warrants made
pursuant to Section 7 hereof, and (b) other modifications approved by Registered
Holders.
SECTION 3. Form and Execution of Warrants; Exercise of Warrants.
(a) Warrants shall be executed on behalf of the Company by its Chairman of
the Board, President, any Vice President or Chief Financial Officer by manual
signatures. In case any officer of the Company who shall have signed any of the
Warrants shall cease to be such officer of the Company before the date of
issuance of the Warrants and issue and delivery thereof, such Warrants may
nevertheless be issued and delivered with the same force and effect as though
the person who signed such Warrants had not ceased to be such officer of the
Company. After execution by the Company, each Warrant shall then be delivered to
the Registered Holder.
(b) Each Warrant may be exercised by the Registered Holder thereof at any
time on or after the Initial Warrant Exercise Date, but not after the Warrant
Expiration Date, upon the terms and subject to the conditions set forth herein.
A Warrant shall be deemed to have been exercised immediately prior to the close
of business on the Exercise Date and the person entitled to receive the
securities deliverable upon such exercise shall be treated for all purposes as
the holder upon exercise thereof as of the close of business on the Exercise
Date. As soon as practicable on or after the Exercise Date the Company shall
deposit the proceeds received from the exercise of a Warrant, and promptly after
clearance of checks received in payment of the Purchase Price pursuant to such
Warrants, cause to be issued and delivered by the Company's transfer agent, to
the person or persons entitled to receive the same, a certificate or
certificates for the securities deliverable upon such exercise (plus a Warrant
for any remaining unexercised Warrants of the Registered Holder).
SECTION 4. Reservation of Shares; Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be issuable upon exercise
of the Warrants and payment of the Purchase Price shall, at the time of
delivery, be duly and validly issued, fully paid, non-assessable and free from
all taxes, liens and charges with respect to the issue thereof (other than those
which the Company shall promptly pay or discharge).
(b) The Company will use reasonable efforts to obtain appropriate approvals
or registrations under state "blue sky" securities laws with respect to the
exercise of the Warrants; provided, however, that the Company shall not be
obligated to file any general consent to service of process or qualify as a
foreign corporation in any jurisdiction. With respect to any such securities
laws, however, Warrants may not be exercised by, or shares of Common Stock
issued to, any Registered Holder in any state in which such exercise would be
unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes and other
governmental charges that may be imposed with respect to the issuance of the
Warrants, or the issuance, or delivery of any shares upon exercise of the
Warrants; provided, however, that if the shares of Common Stock are to be
delivered in a name other than the name of the Registered Holder of the Warrant
being exercised, then no such delivery shall be made unless the person
requesting the same has paid to the Company the amount of transfer taxes or
charges incident thereto, if any.
SECTION 5. Exchange of Warrant.
(a) This Warrant may be exchanged for other Warrants representing an equal
aggregate number of Warrants of the same type. Warrants to be exchanged shall be
surrendered to the Company at its Corporate Office, and upon satisfaction of the
terms and provisions hereof, the Company shall execute, issue and deliver in
exchange therefor the Warrant or Warrants which the Registered Holder making the
exchange shall be entitled to receive.
(b) The Company shall keep at its office books in which it shall register
the Warrants in accordance with its regular practice.
(c) The Company may require payment by such holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
(d) All Warrants surrendered for exercise or for exchange in case of
mutilated Warrants shall be promptly canceled by the Company and thereafter
retained by the Company until the Warrant Expiration Date, or such other time as
the Company shall determine solely within its discretion.
SECTION 6. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to them of the ownership of and loss, theft, destruction or
mutilation of any Warrant and (in case of loss, theft or destruction) of
indemnity satisfactory to them, and (in case of loss, theft or destruction) upon
surrender and cancellation thereof, the Company shall execute and deliver to the
Registered Holder in lieu thereof a new Warrant of like tenor representing an
equal aggregate number of Warrants. Applicants for a substitute Warrant shall
comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe or require.
SECTION 7. Adjustment of Exercise Price and Number of Shares of Common
Stock or Warrants.
(a) Subject to Section (f) and the exceptions referred to in Section 7(e)
below, in the event the Company shall, at any time or from time to time after
the date hereof, subdivide or combine the outstanding shares of Common Stock
into a greater or lesser number of shares (any such subdivision or combination
being herein called a "Change of Shares"), then, and thereafter upon each
further Change of Shares, the Purchase Price in effect immediately prior to such
Change of Shares shall be changed to a price (including any applicable fraction
of a cent) determined by multiplying the Purchase Price in effect immediately
prior thereto by a fraction, the numerator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to such
subdivision or combination, and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately after such subdivision
or combination. Such adjustment shall be made successively whenever such
subdivision or combination is made.
Upon each adjustment of the Purchase Price pursuant to this Section 7, the
total number of shares of Common Stock purchasable upon the exercise of each
Warrant shall (subject to the provisions contained in Section 7(b) hereof) be
such number of shares of Common Stock purchasable at the Purchase Price
immediately prior to such adjustment multiplied by a fraction, the numerator of
which shall be the Purchase Price in effect immediately prior to such adjustment
and the denominator of which shall be the Purchase Price in effect immediately
after such adjustment.
(b) The Company may elect, upon any adjustment of the Purchase Price
hereunder, to adjust the number of Warrants outstanding, in lieu of the
adjustment in the number of shares of Common Stock purchasable upon the exercise
of each Warrant as hereinabove provided, so that each Warrant outstanding after
such adjustment shall represent the right to purchase one share of Common Stock.
Each Warrant held of record prior to such adjustment of the number of Warrants
shall become that number of Warrants determined by multiplying the number one by
a fraction, the numerator of which shall be the Purchase Price in effect
immediately prior to such adjustment and the denominator of which shall be the
Purchase Price in effect immediately after such adjustment. Upon each adjustment
of the number of Warrants pursuant to this Section 7, the Company shall, as
promptly as practicable, cause to be distributed to the Registered Holder of a
Warrant on the date of such adjustment a Warrant evidencing, subject to Section
8 hereof, the number of additional Warrants to which such Holder shall be
entitled as a result of such adjustment or, at the option of the Company, cause
to be distributed to such Holder in substitution and replacement for the Warrant
held by him prior to the date of adjustment (and upon surrender thereof, if
required by the Company) a new Warrant evidencing the number of Warrants to
which such Holder shall be entitled after such adjustment.
(c) Irrespective of any adjustments or changes in the Purchase Price or the
number of shares of Common Stock purchasable upon exercise of the Warrants, the
Warrant or Warrants theretofore and thereafter issued shall, unless the Company
shall exercise its option to issue a new Warrant pursuant to Section 7(b)
hereof, continue to express the Purchase Price per share and the number of
shares purchasable thereunder as they were expressed in the Warrant when it was
originally issued.
(d) After each adjustment of the Purchase Price pursuant to this Section 7,
the Company will promptly prepare a certificate signed by the President, and by
the Chief Financial Officer, Controller, Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Purchase Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant after such adjustment, and, if the
Company shall have elected to adjust the number of Warrants, the number of
Warrants to which the Registered Holder of each Warrant shall then be entitled,
and (iii) a brief statement of the facts accounting for such adjustment. The
Company will promptly cause a brief summary thereof to be sent by ordinary first
class mail to each Registered Holder of Warrants at his last address as it shall
appear in the registry books of the Company. No failure to mail such notice nor
any defect therein or in the mailing thereof shall affect the validity thereof
except as to the Holder to whom the Company failed to mail such notice, or
except as to the holder whose notice was defective. The affidavit of the
Secretary or an Assistant Secretary of the Company that such notice has been
mailed shall, in the absence of fraud, be prima facie evidence of the facts
stated therein.
(e) For purposes of Section 7(a) and 7(b) hereof, the following provisions
shall also be applicable:
(A) The number of shares of Common Stock outstanding at any given time
shall include shares of Common Stock owned or held by or for the account of
the Company and the sale or issuance of such treasury shares or the
distribution of any such treasury shares shall not be considered a Change
of Shares for purposes of said sections.
(B) No adjustment of the Purchase Price shall be made unless such
adjustment would require an increase or decrease of at least $.25 in such
price; provided that any adjustments which by reason of this clause (B) are
not required to be made shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment which, together
with any adjustment(s) so carried forward, shall require an increase or
decrease of at least $.25 in the Purchase Price then in effect hereunder.
(f) Any determination as to whether an adjustment in the Purchase Price
in effect hereunder is required pursuant to Section 7, or as to the amount of
any such adjustment, if required, shall be binding upon the holders of the
Warrants and the Company if made in good faith by the Board of Directors of the
Company.
(g) If and whenever the Company shall declare any dividends or
distributions or grant to the holders of Common Stock, as such, rights or
warrants to subscribe for or to purchase, or any options for the purchase of,
Common Stock or securities convertible into or exchangeable for or carrying a
right, warrant or option to purchase Common Stock, the Company shall notify each
of the then Registered Holders of the Warrants of such event prior to its
occurrence to enable such Registered Holders to exercise their Warrants and
participate as holders of Common Stock in such event.
SECTION 8. Fractional Warrants and Fractional Shares.
(a) If the number of shares of Common Stock purchasable upon the exercise
of each Warrant is adjusted pursuant to Section 7 hereof, the Company shall
nevertheless not be required to issue fractions of shares, upon exercise of the
Warrants or otherwise, or to distribute certificates that evidence fractional
shares. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of such fractional share,
determined as follows:
(A) If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange or listed for
trading on the National Market System of NASDAQ ("NMS"), the current value
shall be the last reported sale price of the Common Stock on such exchange
on the last business day prior to the date of exercise of this Warrant or
if no such sale is made on such day or no closing sale price is quoted, the
average of the closing bid and asked prices for such day on such exchange
or system; or
(B) If the Common Stock is listed in the over-the-counter market
(other than on NMS) or admitted to unlisted trading privileges, the current
value shall be the mean of the last reported bid and asked prices reported
by the National Quotation Bureau, Inc. on the last business day prior to
the date of the exercise of this Warrant; or
(C) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current value shall be an amount determined in such reasonable manner as
may be prescribed by the Board of Directors of the Company.
SECTION 9. Warrantholder Not Deemed Stockholder. No holder of Warrants
shall, as such, be entitled to vote or to receive dividends or be deemed the
holder of Common Stock that may at any time be issuable upon exercise of such
Warrants for any purpose whatsoever, nor shall anything contained herein be
construed to confer upon the holder of Warrants, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issue or reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger or conveyance or otherwise), or to receive
notice of meetings, or to receive dividends or subscription rights, until such
Holder shall have exercised such Warrants and been issued shares of Common Stock
in accordance with the provisions hereof.
SECTION 10. Rights of Action. All rights of action with respect to this
Warrant are vested in the Registered Holder of the Warrants, and the Registered
Holder of a Warrant, without consent of the holder of any other Warrant, may, on
his own behalf and for his own benefit, enforce against the Company his right to
exercise his Warrants for the purchase of shares of Common Stock in the manner
provided in this Warrant.
SECTION 11. Agreement of Warrantholder. Every holder of a Warrant, by his
acceptance thereof, consents and agrees with the Company that the Company may
deem and treat the person in whose name the Warrant is registered as the holder
and as the absolute, true and lawful owner of the Warrants represented thereby
for all purposes, and the Company shall not be affected by any notice or
knowledge to the contrary, except as otherwise expressly provided in Section 6
hereof.
SECTION 12. Gender; Singular and Plural. When the context and construction
so require, all words used in the singular herein shall be deemed to have been
used in the plural and the masculine shall include the feminine and neuter and
vice versa.
SECTION 13. Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of California, without reference to
principles of conflict of laws.
SECTION 14. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified mail, postage
prepaid, as follows: if to the Registered Holder of a Warrant, at the address of
such holder as shown on the registry books maintained by the Company; if to the
Company, at 2067 Commerce Drive, Medford, Oregon 97504, Attention: President.
SECTION 15. Binding Effect. This Warrant shall be binding upon and inure to
the benefit of the Company (and its respective successors and assigns) and the
holders from time to time of Warrants. Nothing in this Warrant is intended or
shall be construed to confer upon any other person any right, remedy or claim,
in equity or at law, or to impose upon any other person any duty, liability or
obligation.
SECTION 16. Termination. This Warrant shall terminate at the close of
business on the Warrant Expiration Date.
ADVANCED MACHINE VISION CORPORATION
By: /s/ Alan R. Steel
-------------------------------------
Alan R. Steel
EXHIBIT 5.1
Opinion of Counsel
May 18, 1998
Advanced Machine Vision Corporation
2067 Commerce Drive
Medford, OR 97504
Re: Registration Statement on Form S-3
Gentlemen:
At your request, we have examined the Registration Statement on Form S-3 (the
"Registration Statement") which has been prepared for filing with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Act"), relating to 652,500 shares of Class A Common Stock, no par value (the
"Shares"), 420,000 of which are issuable upon the exercise of certain stock
options, 200,000 of which are restricted shares requiring the holder to pay
$1.80 per share to the Company and to remain in the employ of the Company for a
certain period of time prior to transferring such restricted shares, and 32,500
of which are restricted shares requiring the holders not to trade such shares
until January 1, 1999. All capitalized terms not defined herein shall have the
definitions ascribed to them in the Registration Statement.
We have examined such records of the Company as in our judgment were necessary
or appropriate to enable us to render the opinions expressed herein. Based upon
the foregoing, it is our opinion that the Shares have been duly and validly
authorized, 232,500 of the shares have been duly and validly issued, 32,500 of
which are fully paid and nonassessable and 200,000 of which, when paid for as
provided in the restricted stock agreements related thereto, will be fully paid
and nonassessable, and 420,000 of the shares, when issued and paid for as
provided in the option agreements related thereto, will be duly and validly
issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement. By giving you this opinion and consent, we do not admit that we are
experts with respect to any part of the Registration Statement or Prospectus
within the meaning of the term "expert" as used in Section 11 of the Act, or the
rules and regulations promulgated thereunder, nor do we admit that we are in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Troy & Gould Professional Corporation
- -----------------------------------------
TROY & GOULD PROFESSIONAL CORPORATION
Los Angeles, California
May 18, 1998
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 23, 1998, except as to the subsequent warrant expirations described in
Note 10, which is as of March 10, 1998, appearing on page F-2 of Advanced
Machine Vision Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Portland, Oregon
May 26, 1998
